Canada's economy barely expanded in April

Economy barely extended a growth streak that's continued since start of year

A sales assistant helps a shopper look at shoe prices last month. Canada's service sector expanded by 0.3 per cent in April. (Kacper Pempel/Reuters)

Canada's GDP eked out a gain of 0.1 per cent in April, extending a growth streak that's continued since the start of the year and in line with what experts were expecting.

Statistics Canada said the service sector expanded by 0.3 per cent, while the goods-producing sector shrank by the same amount. But the service sector was twice as large as the goods sector, so the overall figure was higher.

Spread over 12 months, Canada's economy expanded at an annual pace of 1.4 per cent in April.

Mining, oil and gas extraction, construction and the energy sector all shrank significantly, while almost every other sector of the economy expanded.

"Continued growth in April GDP is encouraging, though it does represent a slowing relative to gains over the previous two months," Royal Bank economist Paul Ferley said.

It could be setting up a weak quarterly figure, because when April's data is added to June's (which is bound to be lower because of the Alberta floods), the result could be the quarterly contraction that many economists are already expecting.

Uptick in arts and entertainment

Two quarterly contractions in a row are held to be the technical definition of a recession.

TD economist Francis Fong was also cautious in her optimism. She notes that a 3.4 per cent gain in the arts and recreation industry could be attributed to the extended NHL season, which had a delayed start in January because of a labour dispute.

If that's the case, higher spending on the NHL when the playoffs were starting is a blip that can't be maintained, now that the season's over.

"The overall picture is reflective of a more restrained second quarter for the Canadian economy," Fong wrote in a commentary.